You could argue that the digital currency market is maintaining its confidence despite the fact that the price of Bitcoin has dropped significantly to $94,000. Although the price action says otherwise, this confidence is highlighted through various predictions from crypto analysts on social media and on TradingView, which cuts across different cryptocurrencies.
Amidst the decline in prices and market optimism, the Crypto Market Fear and Greed Index continues to indicate greed, which leads to the bearish sentiment in the near future. improve back more widely.
Bitcoin Price Crash Stops Bullish Momentum
The crypto industry has largely exhibited momentum through 2024, with many cryptocurrencies reaching multi-year highs. This trend was led by Bitcoin, which broke through the 2021 high of $69,000 in mid-2024 to finally break above the psychological level of $100,000 for the first time on December 5th.
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However, Bitcoin's price action since crossing the six-figure price threshold has been mostly full of corrections. Although it peaked at $108,135 on December 17, the past 12 days or so have been marked by price declines. In particular, Bitcoin has corrected as low as $92,600 in the past seven days, largely leading to a a cascade of declines among other cryptocurrencies and halting the bullish trend.
Bitcoin's descent has surprised many crypto traders, considering its strong rally in recent months. Analysts attribute this correction to profit-taking by a few long-term holders and a temporary slowdown in market activity.
The mood of the crypto market remains in greed
Despite recent price declines, HODLing trends suggest that the cryptocurrency market is still on track to maintain its rally until 2025. This sentiment is reflected in the Fear and Greed Index, which continues to enter the range greed, showing confidence among investors. The index is derived from a combination of key metrics, including market volatility, trading volume, social media sentiment, Bitcoin dominance, Google search trends, and surveys. Each component is carefully weighted to gauge the psychological state of the market.
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At the time of writing, the Crypto Index Fear and Greed, respectively to alternative.me, at a reading of 72, which is in the threshold of Greed. This spreads investor confidence across the various market indicators and suggests that traders see the dip as a buying opportunity rather than a cause for panic.
This feeling of greed is expressed through several buying trends over well-known cryptocurrencies. For example, on-chain data from crypto analytics firm Santiment shows that Dogecoin whales have purchased more than 90 million DOGE tokens in the past 48 hours. With this in mind, analysts are optimistic about a broader market recovery in the coming weeks. Technical indicators point to a Bitcoin-led rebound if it can hold above support levels around $92,000.
At the time of writing, Bitcoin is trading at $94,400 and is down 12.8% since reaching $108,135 on December 17th. according to the crypto analyst Ali Martinez, such corrections (between 20% and 30%) are the best thing that always happens to Bitcoin in every bull cycle.
Featured image created by Dall.E, chart from Tradingview.com
